Avoid the Pitfalls: Risk Essentials for Real Estate Agents
More than half of Australian real estate professionals say client expectations have intensified in the past two years.
ATO benchmarks are updated annually and compare key financial ratios from over two million small businesses across 100-plus industries.
They focus on metrics such as:
For example, if your café’s cost of sales is 44% of turnover, you’re within the benchmark range. However, if competitors are closer to 37%, it may be time to review supplier deals or pricing. For tradespeople, these input benchmarks help you estimate income based on labour and materials, enabling more accurate reporting for high-cash industries like construction or road freight.
A relevant case: A West Australian florist faced extra tax liabilities after falling outside benchmark ranges. A stronger focus on compliance and accurate record-keeping would have benefited that SME.
Benchmarks can also facilitate smarter decision-making. Here’s how they work for you:
The ATO’s business performance check app makes it easy to compare your numbers by automatically calculating key ratios. This official site offers benchmarks from A to Z. If you prefer, calculate ratios manually by dividing expenses like cost of sales by turnover and comparing them with benchmark ranges.
For a more sophisticated approach, check out third-party benchmarking services. They’ll hand you detailed analyses, allowing you to factor in metrics such as employee productivity or stock turnover rates.
The benchmarks cover nine broad industries:
From these, you’ll find subcategories; for example, pubs, bakeries, and kebab shops each have unique benchmarks under food services.
This detailed approach ensures comparisons are relevant whether you’re running a café or a plumbing business.
Keep in mind that benchmarks typically do not account for unique business models or one-off expenses.
As your broker or adviser, we can assist you with benchmarking in the following ways:
By combining insights from ATO benchmarks with tailored insurance solutions, we’ll help ensure your SME is compliant and well-positioned for long-term success.
Get in touch today to learn more about how benchmarks can strengthen your business.
Article Supplied by OneAffiniti
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